depreciated assets below 5000

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if the opening balance of any fixed asset is below rs. 5000 can it be written off in that particular year??

Replies (7)

WDV whose value is less than or equal to 5000 cannot be charged off fully unless it is impaired or disposed off.

Make an accounting policy and disclose in the notes to the preparation of the financial statements that any depreciable asset less than Rs 5000 will be written off.

Vinay is right, it decide by your adopted accouting policy. There is no compultion but in general practise it applies.

Book value can be retained as 1 rupee and the balance c an be w/off subject to management's approval for the values < 5000.For example if Pager has been treated as asset earlier in the books now think about the fate of that item, Its an outdated item. likewise it can be done on case to case basis

 

as per Sc. XIV of the Companies Act, assets whose actual cost does not exceed Rs. 5000 has to be depreciated @ 100%. So, it is the gross block of the asset, not the WDV figure. So, if the WDV at the beginning of the year falls below Rs. 5000 then also, it has to be provided at a minimum of the rate prescribed in Sch. XIV, not fully.

As per schedule XIV of companies act, the assets costing below Rs. 5000 shall be depreciated @ 100%. In case the assets are purchased during the month of March of any of the financial year. Whether the WDV of such assets will be carried fowards in the next year or will be written off 100% in the same year?

No, wrtting off the assets doent have any relation with the Value..

If its usable life is over then, You have to sale it as scrap an then can write off…


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